Treasury Today Country Profiles in association with Citi

Card-based payments are the most sophisticated

Credit card held in front of matrix style binary

The capabilities of the commercial cards are celebrated – and utilised – as ambitious corporates embark on international expansion while also adhering to imminent payment legislation. With the market rapidly changing though, are card payments keeping pace?

Expanding global footprint

Depending on the size and scope of their expansion – and of course the level of comfort of board executives – different corporates will have various payment requirements. Yet for any business expanding internationally, the cross-border consistency and transparency (among other benefits listed below) that card programmes can bring to this type of venture are widely recognised, according to Allister Mitchell, Product Head at Lloyds. “Card-based payments are the most sophisticated and controlled type of payment in the market today – they give corporates much greater visibility without disrupting the flow of business,” he maintains.

Mitchell outlines additional benefits of adopting a global card offering:

  • Certain transactions, such as those that are paid locally/paid with cash/paid through existing banking applications will be absorbed giving visibility over the entire framework.

  • For companies who are immersed in a shared service centre (SSC) environment, a card programme will continue to give them significant process efficiency.

  • Such an initiative offers consistent visibility of the different countries within their scope and that information can then be incorporated into multi country/global contracts. Over time, supplier efficiency can be increased and, as a result, potentially improve contract pricing.


Obviously, this cross-border consistency is essential for corporates who are aware of, and preparing for, imminent regulatory deadlines – namely SEPA. While increased global governance may be cited as a reason for the current reluctance of some businesses to expand, Mitchell believes that the structure of the payments industry actually facilitates the implementation of regulation in a timely fashion. “The domination (of the industry) by a small number of global payment networks helps drive and implement the regulation consistently across countries and within regions,” he says, adding, “It (the structure) allows a lot of comment and discussion on upcoming and impending potential regulations and it enables a more logical approach at a national and a multi country level.” This backdrop then allows the corporate the confidence and comfort to deal with a range of regulations across several different countries.

The next level

Yet, Treasury Insights has spoken of the benefits of a commercial card programme, including the eco-benefits before, so exactly how has the payments market moved on? In the current fiercely competitive environment, only the most innovative and forward-looking companies are thriving, so focusing on the traditional T&E payment products is simply not enough. The more ambitious businesses will be taking an increasingly holistic and strategic approach to payments overall, according to Mitchell. “We are in a post-card era, an application market. Some customers will carry on using plastic but the market leaders will be drawing down online or desktop applications that will enable transactions and give a greater level of control, while limiting their company’s exposure,” he says.

The emergence of online applications now allows customers to avoid the legacy issue of a piece of plastic while still benefitting from the elements of card-based payments – upfront authorisation, anti-fraud/security, global data consistency and increased accuracy. Furthermore, these innovative companies have been able to ‘crack the code’ around what to do with the information received, rather than simply use it as an invoice matching tool. Says Mitchell: “People keep talking about management information (MI) which all of these payment systems generate but some generate actual (globally consistent) intelligence. A certain segment of companies are actually using this information to drive decisions – that’s what separates MI from insight and intelligence.”

Lloyds is currently undergoing a repositioning exercise, building out their payment capability and intend to launch a number of customer applications in line with market demand that will include centralised business travel and online applications by Q1 2013, according to Mitchell. “There is an emerging need for customers’ systems to help figure out what their overall strategic approach to payments is and there is an emerging opportunity to respond to that,” he concludes.